After over a day of deliberations, at around 4:15 Thursday the jury came back with a verdict in Phase I of Gaiman vs. McFarlane, awarding a complete victory to writer Neil Gaiman in his court battle with toy and comic magnate Todd McFarlane.The jury held that:

1.Gaiman has a copyright interest in Medieval Spawn, Cagliostro, and Angela, the three characters he created in his script for Spawn #9.

2.A reasonable person would not have deduced from the copyright notices in the books that McFarlane was claiming copyright ownership in the characters and the scripts (meaning that the statue of limitations had not expired on the copyright claims).

3.There was a contract in 1992 (when McFarlane promised that he would treat Gaiman 'better than the big guys').

4.McFarlane breached the 1992 contract.

5.There was a contract in 1997 (this was the rights swap of Gaiman's interests in Medieval Spawn and Cagliostro for McFarlane's interest in Miracleman, plus setting royalty percentages for all uses of Angela and allowing 'one-off' projects using the characters).

6.Image's failure to identify Gaiman as a writer on some of the books in question caused damage.

7.Image had no right to use Gaiman's name and biography without his permission on its recent reprint of the Angela series in trade paperback format.

McFarlane looked down somberly as the verdict was read.As the judge polled the individual jury members, he looked at their faces.

Judge Shabaz then announced that the trial is now beginning its damage phase. When Gaiman's attorney said they would prefer to begin Friday morning, Judge Shabaz said, 'Of course you would....We'd prefer not to hold the jury over the weekend.' He instructed the attorneys to begin opening arguments in Phase 2 in fifteen minutes. The damages phase of the case is now underway.

McFarlane's attorneys attempted to make a motion for a new trial, but Judge Shabaz refused to hear it until the entire trial, including the damage phase, was completed.McFarlane's lead attorney also pointed out that the finding was 'factually repugnant,' and called it 'a nightmare' in that the verdict held that Gaiman had a copyright interest in Medieval Spawn and Cagliostro, but also held that there was a contract in 1997 (in which Gaiman had agreed to transfer those rights to McFarlane for McFarlane's rights in Miracleman).

Judge Shabaz responded, 'I find no difficulty other than the one you're trying to create,' and refused to take any action other than to proceed with the damages phase of the trial.At this point, Gaiman will have the option to decide if he wishes to get breach of contract damages related to the 1997 and 1992 contracts or start from scratch in determining damages using solely his copyright interests in the characters.Shabaz said the case is '...going out of here by the end of the week.'

The rest of our coverage is in the following articles:

For the damages portion of the trial and post-mortem (this article was written after the one you're reading now)--